Chen, Pu; Semmler, Willi - Institut für Weltwirtschaft (IfW) - 2013
Over-borrowing and financial stress has recently become an important issue in macroeconomic and policy discussions in … the US as well as in the EU. In this paper we study two regimes of financial stress. In a regime of high financial stress …, stress shocks can have large and persistent impacts on the real side of the economy whereas in regimes of low stress, shocks …